nations the tariff on manufactured goods. Personally, I prefer the latter to the former.

5. The reduction of the weight of gold in the dollar will in a short time cancel the necessity of the Reconstruction Finance, which in essence is inflationary but also discriminatory.

6. Let the two Houses of Representatives remain, the Representatives representing the country by districts, but reduce the number of Senators by 50 percent and have all Senators elected at large, giving the Senate virtually the same power as it has now. The reason for this is that we have in Washington only one man representing the United States, whereas all the other elected Representatives often work against the best interest of the United States in favor of a particular district.

STATEMENT OF DR. WALTER L. WILSON, KANSAS CITY, Mo.

It is indeed a great pleasure to have the honor of presenting to you some thoughts in regard to the present distress which has been occupying the thoughts of each of you gentlemen through the past months.

In seeking to diagnose the case which we may call the "sickness of society", I have made contacts with a very wide circle of friends throughout the Middle West, including farmers, school teachers, laborers, miners, professional men, manufacturers, and housewives. I have noticed two things looming up in all the conversations and it deserves our particular attention. One of these is the lack of contentment and the other the lack of confidence.

Discontent seems prevalent in young and old, in rich and poor, in the sick and the well. National discontent prevails. There is discontent with wages, with military strength, with treaties, with taxes, and duties. There is discontent among the students and scholars of our schools and colleges with the respect to laws imposed upon them, class arrangements, social prohibitions. There is discontent between the laborer and his master on every subject that is properly related to this situation.

With all of this discontent there is a lack of confidence, both in the ability and in the willingness of the parties concerned. Suspicion fills the heart of the customer who enters the store to purchase. Suspicion fills the mind of the student as he receives the grade from the teacher; suspicion fills the hearts of patients as they think of the doctor's services. There is distrust in all human relationships and this is international in its scope.

The reason for the existence of these conditions in my judgment lies in a departure from the word of God and a repudiation of relationships with God. Our country was built upon the Bible and its godly principles. Our society has been knit together and our Nation has grown to its present proportions because of the principles and the propagation of the principles of righteousness given by the Lord Jesus Christ and embraced by our people.

The Bible is the only antidote for sin, the only preventive of crime, the only remedy for moral decay. We must turn our ways toward God and promote again the principles and practices of His word.

In order to bring this about, I recommend that there shall be issued to the peoples of our land over the signature of those who are in position to command respect, a call to restore the reading of the scriptures to the family fireside, in the schools and colleges of our land, in our clubs and social organizations, and in the public reading rooms, provided by various social service groups.

I recommend that a plea be made to the preachers of our country to leave the present plan of giving book reviews and lectures on matters of national or international interest while in the pulpit of the church and to return again to the preaching of the word of life and the exaltation of the Lord Jesus Christ.

I suggest also that a request from proper prominent sources be sent to our national magazines and great daily papers requesting that a certain portion of their publications, and a prominent portion, be given to printing the word of truth. There is a peculiar power in the word of God which brings about in human hearts righteousness and honesty. Those who read it obtain from it desire for right relationships with others and right condition within the heart.

I suggest further that an honest endeavor be made to keep the word of God in some form_prominently before the minds and hearts of law enforcement bodies, both Federal, State, and municipal. The Scriptures thus displayed

or presented will have a cleansing and sanctifying power in the lives of this great group upon whose efficiency and honesty so much depends.

Greece and Rome both took the path that we in this country apparently are pursuing. They promoted military strength, physical improvement, great games; they advanced in arts such as painting, sculpturing, and music; they promoted the building of roads and the development of agriculture; but with all of this they neglected to prepare the heart for the ravages of sin and the evils of inmorality which wrecked both of these mighty nations.

Gentlemen, we must make some provision for preservation from the defiling, decaying, destroying results of sin. A proper financial structure will not save society. Good government will not change the human heart. The restoration of the Scriptures in the homes and the hearts of our people will do all of this and will establish again confidence in God, confidence in men, confidence in our rulers, and contentment with such things as we have. I sincerely trust that in some manner your honorable body may devise a program that wil exalt and extol the living word of the living God.

are:

STATEMENT OF IVAN WRIGHT, PROFESSOR OF ECONOMICS, UNIVERSITY OF ILLINOIS In brief, I should say some of the steps toward economic and financial recovery Adjust international trade barriers until trade can be carried on under far competition. We must buy the goods of other countries if they are to buy ours. Cooperate with other countries as in 1922 in stabilizing currencies and trade relations.

Reinvest foreign credits, both public and private, now owed the United States in the capital of those countries.

Reduce our own governmental expenses and taxes and thus restore confidence at home and abroad in the American dollar as the standard of world value. Adjust domestic debts to present price levels.

Establish sound banking and investment banking based on the English principles and set up standards for engaging in banking and investment banking that will give the customer some reason to have confidence.

INTERNATIONAL DEBTS

At present the Allied debts due the United States, as a result of the war and its consequences, would probably amount, in round sums, to about 12 billion dollars.

The foreign private debts owed to investors and lenders in the United States is variously estimated from 12 to 20 billion dollars. Perhaps the value of thes private debts, at the present time, would not amount to more than 10 or 12 billion. Estimates have placed the present value of these debts as low as billion. The foreign governments have objected to paying the debts contracted to the United States Government during and immediately after the war. the ground that the debts grew out of a common cause, and the United States should bear its share in the costs of the war. Moreover, the claim has bee made by both foreigners and Americans that the payment of these debts to t United States, as arranged for over the next 60-odd years in small annus sums with interest, amounting to at most only 300 or 400 million dollars year, is the fundamental cause of the present world depression, resulting fr= a drain of gold out of the debtor countries, causing the depreciation of the currencies and the breakdown of the price system throughout the world.

PRIVATE DEBTS AND TRADE BARRIERS MORE IMPORTANT THAN WAR DEBTS

When the facts are analyzed, we find that the private debts due the Unite States are larger in amount than the Government debts. The installments ar larger and the interest rates are higher.

In addition, the trade barriers have created a maladjustment in the tra between countries and in the balance of payments favorable to the Unit States, wholly out of proportion to the installments on foreign governme debts.

It seems, therefore, rather unfair to ask the American taxpayer to pay t bill for the part the United States played in the war, and then pay a re ̈

of the costs of the Allies in the war, represented by the debts due the United States, in order that private debts, contracted in part for speculative purposes, may be paid, and in order that special industries may be protected for the benefit of certain interests, when the public, in general, who pay the taxes, would be better off if these industries were not protected and there was a freer exchange of goods between countries.

It is indeed difficult to understand the patriotism and economic sense of an international banker, who points out in one paragraph, correctly, that the part of restoring balanced conditions between countries lies in the American investor being willing to invest abroad in the capital of the debtor countries, and then, in the next paragraph, urging a cancelation of the debts these countries owe the United States, and further protection for sheltered industries. The only justification for this point of view is that the United States, the Government, and the people exist for the exclusive benefit of this sheltered few, who anticipate large profits for underwriting foreign securities that would not be possible in the near future if the installments on the debts were reinvested instead of refinanced through new capital issues.

WAYS OF SETTLING THE INTERNATIONAL DEBTS

There are several ways of bringing about a solution to the foreign governmental debts:

1. They may be canceled.

2. Debtor countries may repudiate.

3. Debtor countries may pay the United States, in part, with trade advantages.

4. United States may receive part in territorial concessions.

5. The United States Treasury may invest installments and interest due the United States on the debts in private and public securities of the debtor countries, and when the market is acceptable, resell these securities to investors both in the United States and foreign countries.

6. Payment of a cash lump sum over the next 3 to 5 years.

Any one, or a combination of these possibilities, may solve the debt situation. It seems to the writer that investing in the capital of foreign countries is the soundest disposition of the debts. This is the way England, Germany, France, and Holland collected on the debts the United States owed these countries when we were a debtor country and could not pay. Time and economic conditions worked out the solution.

When the next major depression occurs, the United States may not have half the world's gold. In fact, the next major depression may start when our gold supply has been reduced to the minimum requirements. Under such conditions a backlog of foreign investments will prove of inestimable value. It seems that the English financial system would have long ago completely collapsed had not it been for her protection through foreign investments. The United States should take a lesson from this situation and increase foreign investments of this country in foreign countries as security in times of future crises.

"Would canceling the war debts restore international balances of payment, enable foreign countries to stabilize their currencies, and again start goods flowing between countries in normal course of trade?"

Canceling the debts would have little effect upon these fundamentals, because the installments and interest due is a small item in the unbalanced situation. The chief items creating the maladjustments are tariffs, trade restrictions, and the foreign debts as an item are of less importance than the private debts.

Moreover, all the benefits that could be obtained from canceling the foreign debts can be obtained by reinvesting principal and interest for the time being. Insofar as the debts are a factor, this would leave the funds in debtor countries.

Foreign propaganda in the United States to reduce the debts or cancel them, is supported by statesmen and representatives of foreign countries who have everything to gain and nothing to lose by such acts on the part of the United States; those who have large private investments in the speculative enterprises of foreign countries and who see a greater chance of payment provided the American taxpayer will pay the war debts so European industries can pay their private debts.

Will the American people fall for this propaganda?

STATEMENT OF GEORGE W. YORK, ALBUQUERQUE, N.MEX.

The objective of American business should be to satisfy the "desire" of the American people in terms of goods, and every aid which can be provided by agencies of business and by government should be afforded by those agencies. The following plan is respectfully presented:

I. Permit complete integregation of 'big business." "Big business" is defined for the purpose of this suggestion as any business or service which has up to now found expression in terms of national organization.

(a) Each industry or service must agree to operate in every variety and potency of form constructively and with efficiency. This agreement should be made between each industry and service with all others and with the Govern ment of the United States. If this were done such an agreement would entail upon the parties to the agreement the obligation of each and every industry and service to so conduct its affairs as to leave no undue surpluses in the market.

(b) The prices for goods and service should be fixed for a period of say 18 months or 2 years, and since it is impractical to await an examination of prices for such a time as might be required for such a study and investigation, it is suggested that the prices for say the year 1925 be adopted. During the period in which these suggested prices are in force a complete study of the costs in each service and industry should be made so that at the end of the period the absolute cost for each service and industry should be determined A fair profit to be determined after the cost has been ascertained could be easily and profitably left to the industries and services which would provide a basis for adoption of new prices and for a period in which those prices should endure.

II. The legislation which would be required would be, it is believed

(a) Repeal and/or suspension of all National and State antitrust legislation. (b) Pass such National and State laws as would in effect permit each and every industry and service where three quarters of the whole of such industries and service-made rules and regulations as well as prices to absolutely govern and deny to minorities the right to buy and sell in a market made by the agreement noted in I (b) above.

(c) 1. In order to obtain the results desired it is believed that the Govern ment should pass laws which in effect embargo all products wherein such products produced in the United States were adequate to our uses.

2. Where there is produced in America insufficient goods in any line, tariff based on American money should be applied against foreign goods adequate for the protection of the American producer and laborer.

3. All goods not produced in the United States should be admitted free of duty.

(d) As to the foreign debts owned by the Federal Government, the debtor governments should be permitted to pay these debts when and as they were able to do so. It might be appropriate to call upon such debtors as provide goods or service which are unobtainable in the United States to pay on their indebtedness on some ratio that their imports free of duty bear to the indebtedness of such importing nations.

COMMENTS

The appropriate instrumentality for the organization of business in the fashion suggested in the above-mentioned plan is the United States Chamber of Commerce. It would seem appropriate that the business integration above suggested should be effected through the instrumentality of such an organization as say, the "Institute of American Business" which would be formed by the election of members of each of the above-mentioned service and trade associations, and the home of that institute should be the National Capital Such a program would, it would seem, work equity which in turn would be for the public good. To begin with, it would seem entirely appropriate that the United States Government should have representation in that organization. It would seem that for a continuance of business and government a “unit of value" wholly responsive to the laws of nature should be evolved, and that during the 2 years in which the 1925 prices are to prevail in accordance with the suggestion this unit of value should be determined by agreement between the parties.

If such a program were adopted, it would seem very much less expensive than remedies arising from such agencies as the Reconstruction Finance Cor poration and other now proposed remedies.

REPORT OF THE NATIONAL TRANSPORTATION COMMITTEE

INTRODUCTORY

Herewith are presented:

A. The conclusions of the National Transporation Committee.
B. The report of the committee.

C. Supplemental report by former Gov. Alfred E. Smith who prefaces it, "While I am in substantial agreement with the greater part of the committee report, this supplementary memorandum states my conclusions in my own language, placing the emphasis where I think it belongs."

D. Special studies by the research staff to be published shortly by the Brookings Institution, Washington, D.C.

The committee associated itself at the request of certain business associations, savings banks, insurance companies, and fiduciary and philanthropic institutions interested in railroad securities (see appendix 1) in response to an invitation in essental part as follows:

"We, the undersigned organizations, representing many of the interests concerned, believe that there is no more important present task than a thorough and satisfactory solution of the railroad problem as an integral but the most urgent part of the entire transportation problem. We beg that you examine all phases of the problem and recommend a solution which, with due regard for the public interest, will insure an opportunity for the railroads of this country to be put on a business basis, so that neither now nor in the future will they constitute a present threat to the invested savings of our citizens, to loss of employment to our wage earners, and to the stability of the insurance companies and savings banks, and so that the present burden on the Federal Treasury and the American taxpayer may be in a fair measure removed."

The committee met and organized on October 7, 1932. It was composed of Calvin Coolidge, chairman; Bernard M. Baruch, vice chairman; former Gov. Alfred E. Smith, Alexander Legge, and Clark Howell. John W. Power acted as secretary. The committee selected Dr. Harold G. Moulton, of the Brookings Institution, to organize a research staff.

Just as the committee's work was nearing a close, it lost the distinguished director of its deliberations who was giving his great talents unsparingly to this work. The report had not taken form at the time of his death, but the committee has tried to carry on in the spirit of his leadership.

The committee gathered its facts from three sources:

(1) Open hearings.

(2) Studies by other investigating bodies, memoranda, briefs, and specific suggestions.

(3) The work of Dr. Moulton and the staff.

This mass of material is too voluminous and varied to publish in full, but the work undertaken by the research staff will be published shortly by the Brookings Institution. Dr. Moulton's conclusions are his own.

The transport problem has been with man since the first rude trails of prehistory. It has shaped the destiny of humanity. The closing of the caravan routes to the East Indies discovered America. History is full of similar consequences. Just now, largely due to the recent rapid development of new forms of transportation, the railroad problem is acute in nearly all important countries, including our own. Commissions more or less similar to this committee have been at work in England, Canada, and the Argentine Republic, and we have considered their reports and analyses. There are railroad commissions in nearly every one of our 48 States and similar bodies in many other countries. These, the Interstate Commerce Commission and the very able congressional committees on these subjects, have all been devoting themselves to the problems created by these rapid shifts. Much of this work and a great mass of other data have been assembled and given careful study by the committee. The problem is very complex, and while the committee is in substantial agreement as to conclusions, it is too much to expect that four men of independent mental processes would all arrive at decisions by identical paths, or with equal emphasis on various factors.

A. CONCLUSIONS OF THE COMMITTEE

I. The railroad system must be preserved. Changed conditions require new policies but not abandonment of railroad regulation. The development of